Market Competition In Indian Esg Mutual Funds

Abstract

Increased investor attention globally is going towards financial products that give importance to Environmental, Social, and Governance (ESG) or Sustainable Investing as prescribed by the United Nations Environment Programme Finance Initiative (UNEP FI). Indian Investors, who are always seeking more variety and flavors in financial products, are no exception. India has witnessed an exponential rise in Net Assets Under Management (AUM) because of increased investments by domestic investors. The evidence for this is the quick launch of New Fund Offers (NFO) or repacking of old schemes by Asset Management Companies (AMCs) to tap this opportunity in the Indian mutual fund industry. This paper examines the state of ESG and Sustainable Investing concerning Indian mutual funds. The study finds that ESG investing in India is nascent but is gaining pace with the quick launch of schemes in 2020-2021. The competition and concentration show that the market is gaining perfect competition and is moderately concentrated market. Findings from this research can help AMCs in better product design. Regulators will be able to do better policymaking and investors can benefit from better understanding of ESG concept.